WorksheetsSSPFL8 and SSPFL9 Personal Finance Literacy
Total questions: 35
Worksheet time: 30mins
What is the primary purpose of investing?
To spend money quickly
To build wealth and achieve financial goals
To avoid paying taxes
To increase debt
Which statement best describes diversification?
Investing in one stock for maximum return
Spreading investments across different assets to reduce risk
Avoiding all investments
Putting all money in savings
Why is starting to invest early beneficial?
It guarantees no risk
It allows compounding to work over a longer period
It avoids inflation
It eliminates taxes
Which of the following is a long-term investment strategy?
Day trading
Buying lottery tickets
Investing in retirement accounts
Keeping cash under a mattress
What is a common mistake in investing?
Diversifying portfolio
Starting early
Timing the market
Researching options
6. The most suitable investment option for short-term goals is:
Stocks
Real Estate
Fixed Deposits
Gold
What does the power of compounding mean?
Earnings generate additional earnings over time
Investments lose value quickly
Taxes increase annually
Risk disappears
Why might a diversified portfolio have lower returns during strong market growth?
It eliminates risk
It spreads investments across sectors
It focuses only on one sector
It avoids bonds
Which factor should influence your choice between short-term and long-term investments?
Color of currency
Time horizon and financial goals
Popularity of investment
Friend recommendations
What is the main difference between saving and investing?
Saving involves higher risk
Investing seeks growth while saving focuses on safety
Saving guarantees wealth
Investing avoids inflation
What is the primary purpose of insurance?
To increase financial risk
To provide a safety net against unexpected losses
To guarantee profits
To avoid paying bills
Which of the following best defines risk?
Chance of financial gain
Chance of loss or harm to assets
What is a premium in an insurance policy?
The amount paid out-of-pocket before coverage
Regular payment to maintain coverage
The maximum payout limit
The deductible amount
What is a deductible?
The monthly premium
Amount paid before insurance covers costs
The insurer's profit
The coverage limit
Which type of insurance covers medical expenses?
Auto insurance
Health insurance
Property insurance
Life insurance
Why do insurance rates vary among individuals?
Random selection
Risk factors like age, health, and driving record
Everyone pays the same
Government mandates
Which insurance type provides income if you cannot work due to illness or injury?
Life insurance
Disability insurance
Property insurance
Auto insurance
What is the role of insurance in risk management?
Transfers financial burden from individual to insurer
Increases uncertainty
Eliminates all risk
Avoids legal compliance
Which of the following is NOT a component of an insurance policy?
Premium
Deductible
Coverage limit
Credit score
What does insurability mean?
Ability to pay taxes
Eligibility for coverage based on risk factors
Guaranteed low premiums
Unlimited coverage
If you have a 500deductibleanda 2,000 repair bill, how much will insurance pay?
$2,000
$1,500
$500
$0
You want to minimize risk in your investment portfolio. Which strategy is best?
Invest in one high-performing stock
Diversify across multiple asset classes
Avoid all investments
Put all money in cash
A 25-year-old healthy individual is likely to have which insurance characteristic?
Higher premiums
Lower premiums
No need for insurance
Guaranteed coverage
Which scenario demonstrates the benefit of long-term investing?
Selling stocks daily
Holding investments for 10 years to benefit from compounding
Keeping money in a checking account
Buying lottery tickets
If your goal is to buy a car in 2 years, which investment option is most appropriate?
Stocks
Savings account
Real estate
Retirement fund
Why might someone choose a higher deductible?
To increase premiums
To reduce premiums
To eliminate coverage
To avoid risk
Which factor should you consider when choosing an insurance policy?
Insurer reliability and coverage needs
Color of the policy document
Friend's opinion
Popularity on social media
What is the main advantage of having property insurance?
Covers medical bills
Protects against home damage and theft
Provides income replacement
Pays for vacations
Which of the following is an example of risk management?
Ignoring potential risks
Buying insurance and creating an emergency fund
Spending all income
Avoiding financial planning
Why is diversification important for young investors?
It guarantees high returns
It reduces risk while supporting long-term goals
It eliminates inflation
It avoids taxes
Why is insurance considered a financial agreement, and how does it protect individuals from unexpected losses?
How does the concept of risk apply to personal assets such as health, property, and investments, and why is managing risk important?
What are the key differences among various types of insurance—automobile, health, life (whole and term), disability, and property—and how do they address specific financial risks?
Explain three key differences between index funds and mutual funds.
What does insurability mean, and why do insurance rates vary among individuals and policies?
